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<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 1997
UNIFIED HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-22629 35-1797759
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
429 NORTH PENNSYLVANIA STREET
INDIANAPOLIS, INDIANA 46204-1873
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 634-3301
===============================================================================
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
At a special meeting of shareholders held on December 30, 1997,
the shareholders of First Lexington Trust Company ("First Lexington"), and by
an Action by Unanimous Written Consent of the Sole Shareholder dated June 12,
1997, the sole shareholder of FLTC Acquisition Corporation ("FLTC"), each
voted on and approved and adopted that certain Amended and Restated Agreement
and Plan of Merger dated as of April 25, 1997, as amended by that certain
First Amendment to Amended and Restated Agreement and Plan of Merger dated
December 24, 1997, each by and between Unified Holdings, Inc. (the "Company")
and FLTC, as buyers, and First Lexington, as seller (together, the
"Agreement"). Pursuant to the Agreement, FLTC was merged (the "Merger") with
and into First Lexington, and, among other things, the outstanding shares of
common stock, no par value, of First Lexington, were converted into and
became the right to receive 80,008 shares of common stock, $0.01 par value,
of the Company. The Merger became effective as of December 31, 1997. As a
result of the Merger, First Lexington became a wholly owned subsidiary of the
Company. Dr. Gregory W. Kasten, a principal stockholder and director of the
Company, owned or controlled approximately 37% of the outstanding capital
stock of First Lexington.
First Lexington is a non-bank affiliated trust company that is
regulated by the Department of Financial Institutions, Commonwealth of
Kentucky. First Lexington received its trust charter in March 1994. As of
September 30, 1997, First Lexington reported total assets of $1,125,358 and
shareholders' equity of $1,059,526.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
The following financial statements of First Lexington are
incorporated by reference from Amendment No. 1 to the
Company's Registration Statement on Form 10-SB:
Independent Auditors' Report
Balance Sheet of First Lexington as of December 31, 1996
Statement of Operations and Retained Earnings of First
Lexington for the Year Ended December 31, 1996
Statements of Cash Flow of First Lexington for the Year
Ended December 31, 1996
Notes to Financial Statements
Independent Auditor's Report
Balance Sheets of First Lexington as of December 31, 1995
and 1994
Statements of Income and Retained Earnings of First
Lexington for the Year Ended December 31, 1995 and the
Ten-Month Period Ended December 31, 1994
- 2 -
<PAGE> 3
Statements of Cash Flows of First Lexington for the Year
Ended December 31, 1995 and the Ten-Month Period Ended
December 31, 1994
Notes to Financial Statements
Balance Sheet of First Lexington as of September 30, 1997
(Unaudited)
Statements of Operations of First Lexington for the Nine
Months Ended September 30, 1997 and 1996 (Unaudited)
Statements of Cash Flows of First Lexington for the Nine
Months Ended September 30, 1997 and 1996 (Unaudited)
Note to Financial Statements (Unaudited)
(b) Pro Forma Financial Information:
The following unaudited pro forma combined consolidated
balance sheet gives effect to the acquisition of First
Lexington as if the acquisition was consummated on
September 30, 1997.
The following pro forma combined consolidated income
statements for the nine months ended September 30, 1997
and 1996 and for the years ended December 31, 1996, 1995
and 1994 set forth the results of operations of the
Company combined with the results of operations of First
Lexington as if the acquisition of First Lexington had
occurred as of the first day of each of the periods
presented.
The unaudited pro forma combined consolidated financial
statements should be read in conjunction with the
accompanying Notes to the Pro Forma Combined Consolidated
Financial Statements and with the historical financial
statements of the Company and First Lexington, which were
filed in Amendment No. 1 to the Company's Registration
Statement on Form 10-SB. The historical interim financial
information for the nine months ended September 30, 1997,
used as a basis for the pro forma combined consolidated
financial statements, include all necessary adjustments,
which, in management's opinion, are necessary to present
the financial position and operations fairly. These pro
forma combined consolidated financial statements may not
be indicative of the results of operations that actually
would have occurred if the proposed transactions had been
consummated on the dates assumed above or of the results
of operations that may be achieved in the future.
- 3 -
<PAGE> 4
<TABLE>
UNIFIED HOLDINGS, INC.
PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
- ------
CASH AND CASH EQUIVALENTS $ 603,689 $ 60,708 $ $ $ 664,397
SECURITIES OWNED, AT MARKET VALUE
Debt securities -- 957,771 957,771
Mutual funds (affiliated) 643,232 -- 643,232
Mutual funds 188,234 -- 188,234
NOTE RECEIVABLE - AFFILIATED
COMPANY 50,000 -- 50,000
NOTE RECEIVABLE - NON-AFFILIATED
COMPANY 5,361 -- 5,361
ACCOUNTS RECEIVABLE
Receivables 1,227,296 89,474 1,316,770
Allowance for bad debts (2,041) -- (2,041)
OTHER ASSETS
Prepaid and sundry assets 124,605 6,900 131,505
---------- ---------- -------- -------- ----------
Total current assets 2,840,376 1,114,853 -- -- 3,955,229
---------- ---------- -------- -------- ----------
INVESTMENTS
Investment in affiliated company 377,756 -- 377,756
NOTE RECEIVABLES, net of current maturity 8,090 -- 8,090
ORGANIZATION COST, NET -- 2,550 2,550
DEFERRED DEVELOPMENT COST -- -- --
FIXED ASSETS
Property, furniture and equipment, net 258,223 7,955 266,178
Capitalized lease, net 148,538 -- 148,538
---------- ---------- -------- -------- ----------
TOTAL ASSETS $3,632,983 $1,125,358 $ -- $ -- $4,758,341
========== ========== ======== ======== ==========
<CAPTION>
See notes to pro forma combined consolidated financial statements.
- 4 -
<PAGE> 5
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
LIABILITIES
CURRENT LIABILITIES
Current portion of capitalized lease
obligations 86,320 -- 86,320
Note payable - affiliated company -- -- --
Payable to affiliated company -- -- --
Accounts payable and accrued expenses 607,624 22,177 16,000 <F3> 613,801
Accrued compensation 238,690 -- 238,690
Income taxes payable -- 21,405 21,000 <F3> 405
Deferred income taxes -- 22,000 22,000
Other liabilities 724,435 -- 724,435
---------- ---------- ------- -------- ----------
Total current liabilities 1,657,069 65,582 37,000 -- 1,685,651
---------- ---------- ------- -------- ----------
LONG-TERM LIABILITIES
Long-term portion of capitalized
lease obligations 41,581 -- 41,581
Deferred income taxes -- 250 250
---------- ---------- ------- -------- ----------
Total liabilities 1,698,650 65,832 37,000 -- 1,727,482
---------- ---------- ------- -------- ----------
COMMITMENTS
SHAREHOLDERS' EQUITY
Common Stock 10,728 8,295 8,295 <F1> 800 <F1> 11,528
Preferred A 8,486 -- 8,486
Preferred B 8,583 -- 8,583
Subscribed stock to be issued in
connection with acquisition of
Health Financial 3,250 -- 3,250
Additional paid-in capital 1,148,588 821,705 7,495 <F1> 1,977,788
Retained earnings (accumulated deficit) 635,101 229,526 37,000 <F3> 901,627
Unrealized gain/(loss) on investments 119,597 -- 119,597
---------- ---------- ------- -------- ----------
Total shareholders' equity 1,934,333 1,059,526 8,295 45,259 3,030,859
---------- ---------- ------- -------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $3,632,983 $1,125,358 45,295 45,295 4,758,341
========== ========== ======= ======== ==========
See notes to pro forma combined consolidated financial statements.
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
UNIFIED HOLDINGS, INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
REVENUE
Revenue from broker/dealer operations $1,136,368 $ -- $ $ $1,136,368
Investment adviser fees 1,510,491 -- 1,510,491
Revenue from fund services operations 1,015,451 -- 1,015,451
Trust and administration fees -- 235,179 235,179
Trail commission fees 720,107 -- 720,107
Custody and retirement fees 255,217 -- 255,217
Software and program fees 126,687 -- 126,687
Net investment and other income 107,097 33,849 50,499 <F2> 90,447
---------- ---------- ------- -------- ----------
Gross revenue 4,871,418 269,028 50,499 -- 5,089,947
---------- ---------- ------- -------- ----------
COST OF SALES
Brokerage revenue charges 724,449 -- 724,449
Trail commission charges 502,909 -- 502,909
Investment adviser fees 46,741 16,558 63,299
Administration fees 4,455 27,290 31,745
---------- ---------- ------- -------- ----------
Cost of sales 1,278,554 43,848 -- -- 1,322,402
---------- ---------- ------- -------- ----------
Gross Profits 3,592,864 225,180 50,499 -- 3,767,545
---------- ---------- ------- -------- ----------
EXPENSES
Employee compensation and benefits 2,182,180 -- 2,182,180
Brokerage operating charges 221,534 -- 221,534
Fund services operating charges 189,403 -- 189,403
Mail and courier service 35,940 1,733 37,673
Telephone 77,528 3,954 81,482
Equipment rental and maintenance 61,610 3,785 65,395
<CAPTION>
See notes to pro forma combined consolidated financial statements.
- 6 -
<PAGE> 7
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
Professional fees 90,402 14,136 104,538
Occupancy 153,506 2,500 156,006
Depreciation and amortization 123,581 6,827 130,408
Office supplies 42,691 -- 42,691
Travel and entertainment 68,115 126 68,241
Management fee -- 50,499 50,499 <F2> --
Interest expense 6,232 -- 6,232
Other operating expenses 145,664 25,212 170,876
---------- ---------- ------- ------- ----------
Total expenses 3,398,386 108,772 -- 50,499 3,456,659
---------- ---------- ------- ------- ----------
Income from operations before
gain/(loss) on securities 194,478 116,408 50,499 50,499 310,886
Gain/(loss) on securities 24,996 -- 24,996
Results of affiliate (67,537) -- (67,537)
---------- ---------- ------- ------- ----------
Income before income taxes 151,937 116,408 50,499 50,499 268,345
Provision for income taxes 16,000 37,000 37,000 <F3> 16,000
---------- ---------- ------- ------- ----------
Net income 135,937 79,408 50,499 87,499 252,345
---------- ---------- ------- ------- ----------
Dividends on preferred stock 101,854 -- 101,854
---------- ---------- ------- ------- ----------
Net results after preferred stock
dividend $ 34,083 $ 79,408 $50,499 $87,499 $ 150,491
========== ========== ======= ======= ==========
See notes to pro forma combined consolidated financial statements.
</TABLE>
- 7 -
<PAGE> 8
<TABLE>
UNIFIED HOLDINGS, INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
REVENUE
Revenue from broker/dealer operations $1,463,228 $ -- $ $ $1,463,228
Investment adviser fees 1,207,793 -- 1,207,793
Revenue from fund services operations 1,509,636 -- 1,509,636
Trust and administration fees -- 123,561 123,561
Trail commission fees 759,034 -- 759,034
Custody and retirement fees 206,273 -- 206,273
Software and program fees 143,178 -- 143,178
Net investment and other income 23,095 44,799 46,500 <F2> 21,394
---------- ---------- ------- ------- ----------
Gross revenue 5,312,237 168,360 46,500 -- 5,434,097
---------- ---------- ------- ------- ----------
COST OF SALES
Brokerage revenue charges 916,776 -- 916,776
Trail commission charges 491,977 -- 491,977
Investment adviser fees 42,562 10,132 52,694
Administration fees 3,060 10,431 13,491
---------- ---------- ------- ------- ----------
Cost of sales 1,454,375 20,563 -- -- 1,474,938
---------- ---------- ------- ------- ----------
Gross Profits 3,857,862 147,797 46,500 -- 3,959,159
---------- ---------- ------- ------- ----------
EXPENSES
Employee compensation and benefits 2,122,910 -- 2,122,910
Brokerage operating charges 264,885 -- 264,885
Fund services operating charges 185,803 -- 185,803
Mail and courier service 43,034 -- 43,034
Telephone 45,478 3,553 49,031
Equipment rental and maintenance 62,734 -- 62,734
<CAPTION>
See notes to pro forma combined consolidated financial statements.
- 8 -
<PAGE> 9
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
Professional fees 37,015 13,824 50,839
Occupancy 149,156 2,500 2,500 <F2> 149,156
Depreciation and amortization 137,664 9,420 147,084
Office supplies 45,932 -- 45,932
Travel and entertainment 38,516 -- 38,516
Management fee -- 44,000 44,000 <F2> --
Interest expense 3,364 -- 3,364
Other operating expenses 147,135 39,163 186,298
---------- ---------- ------- ------- ----------
Total expenses 3,283,626 112,460 -- 46,500 3,349,586
---------- ---------- ------- ------- ----------
Income from operations before
gain/(loss) on securities 574,236 35,337 46,500 46,500 609,573
Gain/(loss) on securities 39,929 131 40,060
Results of affiliate (69,399) -- (69,399)
---------- ---------- ------- ------- ----------
Income before income taxes 544,766 35,468 46,500 46,500 580,234
Provision for income taxes -- -- --
---------- ---------- ------- ------- ----------
Net income 544,766 35,468 46,500 46,500 580,234
---------- ---------- ------- ------- ----------
Dividends on preferred stock 102,309 -- 102,309
---------- ---------- ------- ------- ----------
Results after preferred stock dividend $ 442,457 $ 35,468 $46,500 $46,500 $ 477,925
========== ========== ======= ======= ==========
See notes to pro forma combined consolidated financial statements.
</TABLE>
- 9 -
<PAGE> 10
<TABLE>
UNIFIED HOLDINGS, INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
<CAPTION>
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
REVENUE
Revenue from broker/dealer operations $1,846,201 $ -- $ $ $1,846,201
Investment adviser fees 1,679,728 -- 1,679,728
Revenue from fund services operations 1,968,384 -- 1,968,384
Trust fees -- 176,825 176,825
Administration fees 66,000 12,341 66,000 <F2> 12,341
Valuation system fees -- 2,000 2,000
Trail commission fees 995,318 -- 995,318
Custody and retirement fees 246,139 -- 246,139
Software and program fees 190,445 4,181 194,626
Interest income 68,696 59,561 128,257
Other (25,189) 163 (25,026)
---------- ---------- ------- ------- ----------
Gross revenue 7,035,722 255,071 66,000 -- 7,224,793
---------- ---------- ------- ------- ----------
COST OF SALES
Brokerage revenue charges 1,141,291 -- 1,141,291
Trail commission charges 653,595 -- 653,595
Investment adviser fees -- -- --
Administration fees 11,586 -- 11,586
---------- ---------- ------- ------- ----------
Cost of sales 1,806,472 -- -- -- 1,806,472
---------- ---------- ------- ------- ----------
Gross Profits 5,229,250 255,071 66,000 -- 5,418,321
---------- ---------- ------- ------- ----------
EXPENSES
Employee compensation and benefits 2,742,595 -- 2,742,595
Investment advisory fees -- -- --
Administration fees 4,250 12,341 16,591
Software maintenance fees -- 4,181 4,181
Related party employee, supplies and
operating expenses reimbursed -- 66,000 66,000 <F2> --
Brokerage operating charges 332,508 -- 332,508
Investment adviser expenses 49,972 6,066 56,038
Fund services operating charges 233,500 -- 233,500
Market quotes 41,721 -- 41,721
Mail and courier service 63,511 -- 63,511
Telephone 70,279 4,690 74,969
Equipment rental and maintenance 105,122 2,237 107,359
<CAPTION>
See notes to pro forma combined consolidated financial statements.
- 10 -
<PAGE> 11
<CAPTION>
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
Insurance 36,147 13,652 49,799
Professional fees 59,029 15,273 74,302
Occupancy 198,651 5,000 203,651
Depreciation and amortization 185,062 10,002 195,064
Office supplies 63,540 497 64,037
Travel and entertainment 51,513 -- 51,513
Taxes (other than payroll) 72,270 1,776 74,046
Temporary help 13,388 -- 13,388
Advertising and conventions 874 -- 874
Doubtful accounts -- -- --
Interest expense 4,993 -- 4,993
Other operating expenses 50,446 2,272 52,718
---------- ---------- ------- ------- ----------
Total expense 4,379,371 143,987 -- 66,000 4,457,358
---------- ---------- ------- ------- ----------
Income from operations before
gain/(loss) on securities 849,879 111,084 66,000 66,000 960,963
Gain/(loss) on securities 49,684 -- 49,684
Results of affiliate (151,108) -- (151,108)
---------- ---------- ------- ------- ----------
Income before income taxes 748,455 111,084 66,000 66,000 859,359
Provision for income taxes -- 30,000 30,000 <F3>
---------- ---------- ------- ------- ----------
Net income 748,455 81,084 66,000 96,000 859,359
---------- ---------- ------- ------- ----------
Dividends on preferred stock 136,634 -- 136,634
---------- ---------- ------- ------- ----------
Results after preferred stock dividend $ 611,821 $ 81,084 $66,000 $96,000 $ 722,905
========== ========== ======= ======= ==========
See notes to pro forma combined consolidated financial statements.
</TABLE>
- 11 -
<PAGE> 12
<TABLE>
UNIFIED HOLDINGS, INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
<CAPTION>
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
REVENUE
Revenue from broker/dealer operations $2,363,345 $ -- $ $ $2,363,345
Investment adviser fees 1,317,965 -- 1,317,965
Revenue from fund services operations 1,395,782 -- 1,395,782
Trust and administrative fees -- 108,429 108,429
Trail commission fees 540,950 -- 540,950
Custody and retirement fees 163,044 -- 163,044
Software and program fees 213,755 -- 213,755
Net investment and other income 38,092 55,946 94,038
---------- ---------- ------- ------- ----------
Gross revenue 6,032,933 164,375 -- -- 6,197,308
---------- ---------- ------- ------- ----------
COST OF SALES
Brokerage revenue charges 1,244,893 -- 1,244,893
Trail commission charges 130,281 -- 130,281
Investment adviser fees 45,561 55,701 101,262
Administration fees 12,316 -- 12,316
---------- ---------- ------- ------- ----------
Cost of sales 1,433,051 55,701 -- -- 1,488,752
---------- ---------- ------- ------- ----------
Gross Profits 4,599,882 108,674 -- -- 4,708,556
---------- ---------- ------- ------- ----------
EXPENSES
Employee compensation and benefits 2,392,953 -- 2,392,953
Brokerage operating charges 577,373 -- 577,373
Fund services operating charges 170,395 -- 170,395
Mail and courier service 76,522 76,522
Telephone 154,887 913 155,800
Equipment rental and maintenance 151,787 -- 151,787
Professional fees 74,911 12,349 87,260
Occupancy 215,402 5,000 220,402
Depreciation and amortization 148,789 532 149,321
Office supplies 60,647 36 60,683
Travel and entertainment 55,768 -- 55,768
Interest expense 7,429 -- 7,429
Other operating expense 271,802 13,755 285,557
---------- ---------- ------- ------- ----------
Total expense 4,358,665 32,585 -- -- 4,391,250
---------- ---------- ------- ------- ----------
<CAPTION>
See notes to pro forma combined consolidated financial statements.
- 12 -
<PAGE> 13
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
Income from operations before
gain/(loss) on securities 241,217 76,089 317,306
Gain/(loss) on securities 35,356 -- 35,356
Results of affiliate (1,599) -- (1,599)
---------- ---------- ------- ------- ----------
Income before income taxes 274,974 76,089 -- -- 351,063
Provision for income taxes -- 19,354 19,354 <F3> --
---------- ---------- ------- -------
Net income 274,974 56,735 -- 19,354 351,063
---------- ---------- ------- ------- ----------
Dividends on preferred stock 136,757 -- -- 136,757
---------- ---------- ------- ------- ----------
Results after preferred stock dividend $ 138,217 $ 56,735 $ -- $19,354 $ 214,306
========== ========== ======= ======= ==========
See notes to pro forma combined consolidated financial statements.
</TABLE>
- 13 -
<PAGE> 14
<TABLE>
UNIFIED HOLDINGS, INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
REVENUE
Revenue from broker/dealer operations $2,905,597 $ -- $ $ $2,905,597
Investment adviser fees 507,526 15,266 522,792
Revenue from fund services operations 979,155 979,155
Trail commission fees 605,774 -- 605,774
Custody and retirement fees 194,416 -- 194,416
Software and program fees 224,386 -- 224,386
Interest income -- 38,577 38,577
Other 167,273 167,273
---------- ---------- ------- ------- ----------
Gross revenue 5,584,127 53,843 -- -- 5,637,970
---------- ---------- ------- ------- ----------
COST OF SALES
Brokerage revenue charges 1,664,496 1,664,496
Trail commission charges 104,437 104,437
Administration fees -- -- --
---------- ---------- ------- ------- ----------
Cost of sales 1,768,933 -- -- -- 1,768,933
---------- ---------- ------- ------- ----------
Gross Profit 3,815,194 53,843 -- -- 3,869,037
---------- ---------- ------- ------- ----------
EXPENSES
Employee compensation and benefits 1,864,450 -- 1,864,450
Brokerage operating charges 651,291 -- 651,291
Investment adviser expenses 17,940 -- 17,940
Administration fees 2,450 -- 2,450
Fund services operating charges 114,181 -- 114,181
Market quotes 72,444 -- 72,444
Mail and courier service 136,404 -- 136,404
Telephone 147,377 863 148,240
Equipment rental and maintenance 112,069 -- 112,069
Insurance 64,339 7,943 72,282
Professional fees 39,404 3,379 42,783
Occupancy 172,850 5,000 177,850
Depreciation and amortization 143,145 234 143,379
Office supplies 12,106 7,577 19,683
Travel and entertainment 59,692 -- 59,692
<CAPTION>
See notes to pro forma combined consolidated financial statements.
- 14 -
<PAGE> 15
ADJUSTMENTS AND ELIMINATIONS
UNIFIED FIRST ---------------------------------------
CONSOLIDATED LEXINGTON DEBIT CREDIT CONSOLIDATED
------------ --------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
Taxes (other than payroll) 56,357 -- 56,357
Temporary help -- -- --
Advertising -- 265 265
Doubtful accounts 5,616 -- 5,616
Interest expense -- -- --
Other operating expenses 92,735 11,931 104,666
---------- ---------- ------- ------- ----------
Total expense 3,764,850 37,192 -- -- 3,802,042
---------- ---------- ------- ------- ----------
Income from operations before
gain/(loss) on securities 50,344 16,651 -- -- 66,995
Gain/(loss) on securities 81 -- 81
Results of affiliate -- -- --
---------- ---------- ------- ------- ----------
Income before income taxes 50,425 16,651 -- -- 67,076
Provision for income taxes -- 3,452 -- 3,452 <F3> --
---------- ---------- ------- ------- ----------
Net income 50,425 13,199 -- 3,452 67,076
---------- ---------- ------- ------- ----------
Dividends on preferred stock 108,377 -- -- -- 108,377
---------- ---------- ------- ------- ----------
Results after preferred stock dividend $ (57,952) $ 13,199 $ -- $ 3,452 $ (41,301)
========== ========== ======= ======= ==========
See notes to pro forma combined consolidated financial statements.
</TABLE>
- 15 -
<PAGE> 16
UNIFIED HOLDINGS, INC.
NOTES TO PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
<F1> On December 31, 1997, the Company acquired First Lexington located in
Lexington, Kentucky, in a transaction accounted for under the
pooling-of-interests method of accounting. In connection with the
acquisition, the Company issued 80,008 shares of Common Stock.
<F2> The pro forma combined consolidated financial statements include the
accounts of the Company and First Lexington. All intercompany
accounts between the Company and its subsidiaries have been
eliminated.
<F3> The Company files consolidated federal and state income tax returns
with its subsidiaries. Subsequent to the acquisition, First
Lexington will be included in the consolidated returns of the
Company, which uses the accrual method of tax and accounting
reporting. The Company will utilize its net operating loss deduction
to reduce the taxable income from its subsidiaries. The income tax
effect has been eliminated in the pro forma combined consolidated
statements of perations.
<F4> The unaudited balance sheet as of September 30, 1997 and the unaudited
statements of operations for the nine months ended September 30, 1997
and 1996 have been prepared in accordance with generally accepted
accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management of the Company,
all adjustments considered necessary for a fair presentation have
been included.
(c) Exhibits
None
- 16 -
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: January 9, 1998
UNIFIED HOLDINGS, INC.
By: /s/ Timothy L. Ashburn
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Timothy L. Ashburn, Chairman of the Board,
President and Chief Executive Officer
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